Planning your finances in advance is tough, especially if saving isn’t one of your strong points. But, putting aside money every month for that December holiday should be motivation enough to get you started.
‘The first thing you have to think about is what kind of holiday you want,’ says Gareth Davies, a financial planning specialist from Private Client. Whether it’s an overseas trip or a local getaway, you need to make this decision to get an idea of the budget you’ll need, he says.
FIVE MONTHS TO GO
Discipline
Once you know what to budget for, you can save a specific amount of money every month, says Davies. Some prefer opening a separate bank account for their holiday money, he says, but if you are a disciplined saver, this may not be necessary. It’s important to remember that another bank account may mean extra bank charges.
Be aware of what
options various banking institutions are offering. If your money is too easily accessible, you may find yourself dipping into your holiday savings before you’ve even started planning your trip, warns Davies. ‘A good solution would be a fixed deposit account where a notice period is required to gain access to your savings.’ The added bonus? ‘These accounts also offer higher interest rates than normal accounts.’
Now is the time to have a look at your current budget and make a list of what your fixed expenses are, says Davies. ‘You will be surprised at how much money is spent on things you don’t really need.’ Remember, he says, there’s always room to save; you just need to learn to cut out the unnecessary expenses no matter how hard it may appear to be.
FOUR MONTHS TO GO
Research
Many places, including airlines and car rental companies, offer discounts if you book in advance, says Davies, so start your research early. He suggests scouring the web to compare fares and discounted rates, as well as check to see if there are any specials running. ‘When you book a car, don’t be scared to ask for specials,’ he explains. ‘Often you can get an upgrade for the same prices as the lowest budget car.’ If you are part of loyalty programmes, he adds, don’t let your benefits and bonus discounts go to waste.
‘By this stage, you should be able to see if you are on track,’ he says. If you find you aren’t, he suggests cutting back on the spending or picking a cheaper holiday. If your social life is cutting into your holiday saving plan, Davies suggests making your own food at home instead of eating out, shopping at cheaper stores and packing lunches for work.
THREE MONTHS TO GO
Book!
Now it’s time to actually make your reservations to ensure availability and avoid any extra expenses, says Davies. ‘Assess where you are. If things are looking slack, look at getting your friends in on the act.’ He suggests hosting a friendly competition to see who can save the most.
TWO MONTHS TO GO
Keep Saving
‘Now that you have booked your accommodation and transport, the rest of your savings will go towards food and entertainment.’ Davies advises to start saving more than you originally planned to, as things can go unexpectedly wrong during busy holiday periods and the last thing you want is for your saved holiday finances to be used for that flat tyre you picked up last week.
ONE MONTH TO GO
Get Ready… It’s Here!
Everything is booked and paid for, so it’s time to start planning your itinerary. After four months, you should have saved up enough spending money for your trip. If not, make sure to spend your money wisely this month, as this will be your last chance to bulk up your purse before you leave. Remember, if you’ve chosen to open a
32-day fixed deposit account, now would be the time to make the call to the bank to ensure your money is available by the time you jet off.